GST Council to slash tax on footwear, apparel priced under Rs 2,500 to 5%

The Goods and Services Tax (GST) Council, in its 56th meeting chaired by Union Finance Minister Nirmala Sitharaman, has reportedly approved a major relief measure for consumers in the footwear and apparel segment. Sources told news agency PTI that the Council has decided to extend the 5% GST rate to footwear and clothing priced up to Rs 2,500 per piece.

Currently, footwear and apparel costing up to Rs 1,000 attract 5% GST, while items above this threshold fall under the 12% slab. With the new decision, the limit for the concessional rate has been more than doubled, offering significant benefits to middle-income households and potentially boosting demand in the sector.

The meeting, attended by finance ministers from all states and Union Territories, also deliberated on broader rationalization of tax slabs. The Council agreed in principle to phase out the 12% and 28% brackets, with most goods expected to be absorbed into the 5% and 18% categories. Officials indicated that the move is aimed at simplifying the tax structure, reducing compliance burdens, and creating a more predictable regime for businesses.

Formal notifications are expected shortly, after which the revised rates will come into effect.